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UK Prime Minister David Cameron has a new vision of the welfare state. He wants state benefits to be a safety net – and nothing more!,

The Prime Minister outlined future radical changes which on top of existing plans, could save the UK an extra £10 Billion (GBP) by 2016.

Government ministers expect this “next wave” of benefit cuts to include the axing of all housing benefit currently paid to around 380,000 people aged under 25.

Such a move would force many young adults to move back in with their parents rather than living independently.

Another controversial reform which could come in further down the line is setting benefit payments regionally – which would mean less money going to claimants who live in less-expensive parts of the country.

Some Tory MPs say the current system is unfair – with differing “incentives” on people to seek work depending on where they live. Liberal Democrats, however, would be likely to oppose any such changes.

The Prime Minister said his overall aim in reforming welfare was to stop people “languishing on the dole and dependency”.

Here are some of the welfare reforms Mr Cameron is considering

• Stopping most under-25s claiming housing benefit. Cameron said the government was spending almost £2bn a year on housing benefit for this group, and that 210,000 people aged 16 to 24 were social housing tenants. Many of them could live with their parents, he suggested.

• Scrapping the non-dependent deduction. Cameron said people could lose up to £74 a week in housing benefit if they have an adult child living with them. That “doesn’t seem right”, he said.

• Cutting benefits for the under-21s. Cameron said that in Holland the benefit system does not normally help the under-21s. When it does, benefits are set at a low level, and parents are expected to top them up.

• Ending subsidised social housing for the wealthy. Cameron said that between 12,000 and 34,000 families on more than £60,000 a year, and between 1,000 and 6,000 families on more than £100,000 a year, were living in council homes. “When you have people on £70,000 a year living for £90 or so a week in London’s most expensive postcodes you have to ask whether this is the best use of public resources,” he said.

• Uprating benefits in line with wage inflation instead of price inflation when price inflation is much higher. Cameron said in September benefits went up by 5.2% (inflation) even though workers were getting much lower pay rises. “Given that so many working people are struggling to make ends meet we have to ask whether this is the right approach,” Cameron said.

• Cutting benefits for the long-term unemployed. Cameron said that when the Americans decided to time-limit benefits in the 1990s, case-loads fell by more than 50%. “Instead of US-style time-limits – which remove entitlements altogether – we could perhaps revise the levels of benefits people receive if they are out of work for literally years on end,” he said.

• Cutting housing benefit further.
The government has already introduced a benefit cap to stop a relatively small number of families claiming exorbitant sums in housing benefit. But Cameron said this would still allow people to receive up to £20,000 a year in housing benefit. “Surely we should ask if it’s fair that the maximum amount that you can get on housing benefit is set at a level that only the top five per cent of earners would otherwise be able to afford,” he said.

• Stopping people from claiming child-related benefits if they have more than a certain number of children. Cameron did not say how many children, but he quoted the number of people on income support with three or more children (150,000) and four or more children (57,000), implying benefits could be capped at two children.

• Requiring people on out-of-work benefits to gain basic literacy and numeracy skills.

• Requiring people on out-of-work benefits to prepare a CV.

• Requiring able people on out-of-work benefits to do full-time community work after a certain period. In Australia this was standard after just six months, Cameron said.

• Requiring people on sickness benefits to improve their health. “Today if someone is signed off work with a bad back there’s no requirement to take steps to get well to keep on receiving that benefit – even if they could be getting free physiotherapy to get back to health and start working again,” Cameron said.

• Requiring more single parents to work – or at least to prepare for work. Cameron said the government was already forcing single parents to look for work when their youngest child reaches five, not seven as before. But, with free nursery care available from the age of three, there was a case for changing the rules again, he said. “Even if there’s no scope for actually working, there should at least be for preparing to work: getting down to the job centre; writing a CV; learning new skills.”

• Imposing tougher restrictions on people claiming benefits if they have never worked than if they have paid tax and national insurance for years before submitting a claim.

• Stopping teenagers from claiming benefits as soon as they leave school. Cameron said he wanted to ask “if it’s right that people continue to have the option of leaving school and going straight onto benefits, without ever having contributed to the system in any way.”

• Stopping paying winter fuel payments and other non-contributory benefits to people who live abroad.

• Stopping paying some benefits in cash and paying them instead in benefits in kind, like free school meals.

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